Will the European Investment Bank lead on sustainable energy lending or lag behind the World Bank?

On 23 July, the board of the European Investment Bank (EIB), the world’s largest public financial institution [1], will vote on its energy lending policy. WWF urges the EIB’s board members to announce a clear phase out of support for coal and to support renewables as the new norm in energy production.

Next week’s vote will be based on the disappointing draft “Energy Lending Policy” the EIB released on 24 June [2]. WWF is concerned that actions in the framework of this review of EU’s public bank, do not support a 2°C climate change limit in Europe by 2050 [3].

The review plainly shows the EIB currently does not see stopping investment in unsustainable fuels like fossil fuels or nuclear energy as a priority.

Quotes from Sebastien Godinot, Economist at WWF European Policy Office:

“The EIB stands at a historic turning point. The world’s largest public financial institution can either decide to lock parts of the world in the dirtiest of fossil fuel power sources ever, or bet for a clean and sustainable future.

Next week, the EIB board members should show their commitment to a clear phase out of support for coal, by decreasing the level of the emissions cap for fossil fuel power plants that can be eligible for funding as well as discarding all exemptions to this cap [4].

As the World Bank announced on 16 July that it would limit funding to coal power plants to “only rare circumstances”, the EIB cannot afford to lag behind on sustainable energy lending, given the ambitious EU climate targets by 2050 and the repeated EU commitments to phase out harmful subsidies for fossil fuels.

The EIB also needs to set measurable financing targets for energy efficiency and renewable energy support – as a way to send a clear and strong signal to both investors and the industry.”

Seize Your Power, WWF's new global campaign

WWF's new global campaign, Seize Your Power, calls on financial institutions to significantly increase their funding of renewable energy and cut funding to fossil fuels because we recognise that the level of CO2 emissions in the world requires drastic action to limit global warming.

ENDS

Note to the editors:

[1] The European Investment Bank is by far the biggest public bank in the world, lending a huge €12 billion to the energy sector every year.

5. Boost energy savings and renewable energies lending – with a greater emphasis on the refurbishment of buildings and a pivotal role in targeted securitization platforms.

[4 ] The Emission Performance Standard is an absolute cap of emissions per kWh of electricity produced in a power plant. The EIB wants to set this at 550 g CO2/kWh, following current practice, instead of taking a step that will have real meaning and set it at 350 g CO2/kWh. Even though the EIB proposes an Emission Performance Standard of fossil fuel power plants which is in theory low enough to rule out the funding of coal and lignite fired plants, the exemptions introduced as regards to energy security in the EU as well as economic development and poverty alleviation outside the EU, potentially nullify the proposal.